Walmart and Microsoft Join Hands To Bid For TikTok, Fighting Against A Common Enemy: Amazon.
On Thursday, Walmart confirmed, that it will be teaming up with Microsoft, to bid for the purchase of TikTok. The step they took, is considered as a move forward in the direction to tackle Amazon; Amazon being a competitor for both. In the field of Cloud, Microsoft faces stiff competition from Amazon, whereas, Amazon growing e-commerce market is a threat to Walmart.
It is interesting to know that Microsoft and Walmart are already partners. They have a five-year contract to strengthen their businesses in the fight against a common enemy; Amazon.
It will be a long fight against Amazon! However, if they will fight together, they might get an edge over Amazon. If they succeed in occupying TikTok, they will have access to one of the biggest user databases, consisting of billions of users.
Daniel Newman, Futurum Research analyst, in a statement to Business Insider, clarified the situation, stating:
“With the demographic that TikTok serves, the e-commerce play that can tie to the riches of data being created on the platform will have a greater means to directly monetize with Walmart’s expansive online commerce and logistics experience.”
Though, according to Newman, teaming-up to purchase TikTok, can not be seen as a direct take to fight against Amazon. It is more like a small part of a larger picture; the larger picture, is yet to be revealed.
He also added that if the deal between Walmart, Microsoft and TikTok goes through, Amazon could strengthen its ties with Facebook and Instagram. It will lead to a bigger social media e-commerce market.
A statement released by Walmart showed a clear sign of excitement by the company. Walmart is planning to use the audience database of TikTok for advertisement and increasing its reach to more audiences.
The statement says: ‘We are confident that a Walmart and Microsoft partnership would meet both the expectations of U.S. TikTok users while satisfying the concerns of U.S. government regulators,’
No one can question the popularity of TikTok. In the U.S market, it has nearly 100 million users. However, the parent company ByteDance is under immense pressure by the government of the U.S. The U.S government is forcing ByteDance to either sell the company or quit business from the U.S, as it fears that the company is just a puppet for the Chinese government and it could be seen as a threat to the cybersecurity of the U.S.
It is not just Microsoft which is showing interest in TikTok. There are several other techs. Firms which are seeking to acquire the database of TikTok, Oracle is amongst one such big name.
The asking price for TikTok is yet not revealed by the parent firm ByteDance. However, it is reported by the Wall Street Journal that the value estimated is about $30 billion for the business of TikTok in the U.S.
Although, the bidders feel that TikTok is expecting too much for the business. Yet, no comments on this have been shared by the TikTok.
TikTok has always played smart and tried to portray a neutral outlook, hiding its roots which are in China. One such notable step was hiring Kevin Mayer as its American CEO for the business.
Unfortunately, Mayer did quit TikTok only completing just a few months of his service in the company. The reason given to the employees of the company was ‘political environment has sharply changed,’ which is indeed the truth.
ByteDance formed TikTok in 2017, they later bought Music.ly a video application which was very popular with kids in the US and Europe.
The U.S government fears that the Chinese application is sharing the data of its people with the Chinese government. However, the owners of the application deny any such claim.
With the U.S president determined to shut down the business of the Chinese application in the U.S. It would be impossible for TikTok to escape this without facing the damage.
The Chinese application has until September 15, either it can shut its business in the U.S or sell it to an American company.
President Trump has in a statement on August 18, stated that Oracle was ‘a great company’ that ‘could handle’ buying TikTok. However, he didn’t specifically comment on which one is the best (Microsoft or Oracle).
TikTok Market Struggles In Midst Of Trade War Between USA and China!
The uprising trade war between the USA and China is not a new issue in the market. Everyone knows about the ongoing trade war between the two countries. Among these tense scenarios, TikTok is fighting hard, not to get trapped in between. However, it is hard to avoid the damages to the ship when you are in the sea and get dragged in a sea storm.
After facing banishment from its largest user market, i.e. India, now TikTok is facing the threat of getting banned in the USA. Recently, Secretary of State in the US, Mike Pompeo announced, that the USA is in the process of banning the Chinese application TikTok, in the USA. This announcement came soon after India banished 59 Chinese apps from its market.
USA President, Donald Trump’s re-election campaigns clearly showed dissatisfaction with China. The campaign showed support to Pompeo’s statements, supporting the banishment. One of the campaign ad slogan used by the Trump campaign announced: “WARNING: China is spying on you.” This campaign was visible on Facebook and requested users to sign a petition in support of the banishment of TikTok.
However, in response to this, the TikTok spokesperson blamed Facebook. They said that Facebook is charging money for the campaign and defaming TikTok to uplift its product which is Instagram Reels.
Instagram recently launched this new feature on its platform. The feature also allows the users to create short videos, just like TikTok.
Although TikTok is among the less favorable advertising option among the advertisers. Even though TikTok has or say had 2 billion users, still due to the high price of advertisement advertisers less likely trusted TikTok for advertisement purposes. Therefore, not many advertisers are concerned about the war and banishment on the Chinese application. Most of the advertisers stated that the TikTok was still in an experimental phase of their advertisement strategy.
Image Credit – Twitter.
One of the main reasons for that could be the reason for TikTok being new in the market. It has been only a year since TikTok provided the option for advertisement on its platform. However, instead of being new TikTok received several positive responses from the advertisers. The brands were impressed with the growth and advertising solutions provided by TikTok. However, still, TikTok needs to climb multiple stairs to reach the moon it is dreaming, since the standards of the market are set quite high.
The most important factor related to TikTok is brand safety. Due to its origin from China, many brands are keeping their distance from the platform. They intend to maintain this distance even if TikTok moved its operations from China.
According to TikTok, they removed nearly 49.2 million videos from their platform. These videos did not follow their community guidelines. They did it between the time frame of 1st July and 31st December. They also claimed that nearly 89.4% of the removed content was never viewed by anyone on the platform, hence this content never received any reviews. However, around 5 million videos with exploited content, that did not follow the terms and services policies of the platform got viewed by people, raising another concern in the market.
To make sure that the company provides a safe-advertising solution to the advertisers, the company has decided to work with several different third-party clients like Openslate, Doubleverify, Integral Ad Science, and Moat.
A spokesperson from TikTok stated, “We’re in the early stages of working with these partners and will be able to provide more information at a later date, but we can say that advertisers are excited by these partnerships and the controls that we are seeking to provide for their campaigns.”
A survey found that the most downloaded users of TikTok are between 6-18 year old. This data is from the UK, from the year 2019. Also, during the period of lockdown, 14% of children between the age of 3- to 10 years downloaded TikTok, and 31% were between the age 13-18 years of age. The data was issued by the U.K communications regulator Ofcom.
Image credit – Sensor report.
According to an ad buyer, TikTok violated the policy of the Children Online Privacy Protection Act, when the application was known with the name of Music.ly. Later, TikTok paid $5.7 million to settle the Federal Trade Commission allegations. The allegations were made due to the collection of personal information from children, aged under 13-years. However, Musical.ly was ordered by the authorities, demanding the removal of videos uploaded by the children under the age of 13 years. As these videos were uploaded, without the concern of the child parents.
Brendan Gahan, partner and chief social officer at digital agency Mekanism, issued a statement stating, “that is a bad way to introduce yourself to a new market.”
When announced, Mekanism and its clientèle did a review of the details of the violation. The news regarding the violation stated: “planned activations under the microscope,” said Gahan. However, the Makanism discovered that the mistake was made by Music.ly.
To be clear, TikTok launched in 2016, and ByteDance purchased Musical.ly in 2017 and later in 2018 transferred its users to TikTok.
Image Credit – influencermarketingh.
However, TikTok still faces a threat to COPPA. Federal Trade Commission and the USA. Department of Justice is looking into the claims filed that the short-video application is not deleting the videos of underage children on its platform. If these claims are found to be true and the commission and the Justice Department of the USA find any such content which includes children under age the age of 13 years, then TikTok will have to face severe challenges in the USA.
However, according to TikTok, it takes “safety seriously for all our users,” and also offers a “limited app experience” in the USA.
Hence, providing extra safety experience to the users in the USA. TikTok also has a 12+ ranking on the app store. Which means parents can block the application for their children, who are under the age of 13.
Reports suggest that the short video application is planning to generate a revenue of $500 million from the USA market. To achieve that TikTok has hired sales representatives. It has also launched its self-service advertisement tool. These tools will help advertisers to create a high-end graphic and advertising content with sound. Also, TikTok is now aiming for the SMEs, to make sure it attracts the small and medium enterprises TikTok has launched several luring plans for the business so that they can start advertising on its platform.
Also, advertisers who have boycotted Facebook are looking for a new platform to get started with their advertisement campaigns.
The increase in the audience on the platform is one of the greater factors that the short video platform is attracting an audience for the advertisement.
Apart from the condition of banishment on the application, all the other factors play in favor of the app.
According to Amy Luca, chief executive of influencer marketing platform theAmplify, “There’s a cautious tone but there’s not a big concern for brands right now.” If the application saves itself from the trade war between the US and China, “At the end of the day, advertisers will want to be where their audience is spending time and right now, if you are looking to engage a young audience, TikTok is a good strategy.”
TikTok Launches New Business Solutions To Help SMEs in MENA
The short-video application has recently launched a set of new advertising solutions. TikTok strongly feels that these solutions will help the small and medium enterprises in the Middle East region. By using TikTok for business, these SMEs can grow their market and brand value.
TikTok has made sure that the new tool is easy to use, and it can help advertisers reach global audiences with their products. Since the small and medium businesses are severely affected by the COVID crisis, the platform with the new feature will help them cope with the issue to some extent.
The Back-to-Business credit plan includes a $100 million advertisement credit reserve for SMEs. This credit is devoted to rebuilding small businesses and brands. The credit is available for worldwide markets, including the MENA region as well.
Now, the TikTok business is equipped with self-service tools. These tools will help the advertisers in a step-by-step campaign creation process. As the application is known for its creative content by its users, the toolkit will help the advertisers to create unique advertising content.
Therefore, due to the extended reach to audiences, more brands realize the potential of advertising on this application platform. With the new toolkit in place, TikTok is going to attract more number of small and medium businesses.
“TikTok’s immersive, short-form videos give businesses a platform to participate and engage with a community known for its creativity, ingenuity, and joy,” said Blake Chandlee, Vice President, Global Business Solutions at TikTok.
Further, Blake stated, “As our marketing solutions scale and evolve, we’re continuously building for the future and aiming to meet the growing needs of our partners. We’re excited to continue supporting our community by providing the tools and resources for SMB owners to navigate these challenging times.”
In another statement issued by Shant Oknayan, General Manager of Global Business Solutions MENA:
“The MENA region is a big focus for TikTok’s efforts in the Small and Medium Businesses space. SMBs play a vital role in communities across the region, and we are working very hard to ensure that those businesses can leverage the power of the platform to further build brands in a new, authentic, and engaging way. Brands will also have the flexibility to expand their reach beyond the current media ecosystem and tap into those consumers and opinion leaders that cannot be reached on other platforms.”
The TikTok’s self-service toolkit is available globally:
With the help of a simple interface, the TikTok AdManager toolkit for business empowers all businesses including SMEs. However, creative tools make it even easier for advertisers.
Key features of the product include:
Creative tool: The creative toolkit helps the advertisers to unleash their skills. These tools help the advertisers match the innovative standards of the application and its users. With the help of TikTokAdStudio, brands can tell their stories and can portray the most authentic version of their brand to the audiences.
Flexibility in the budget: The budget flexibility helps different businesses set a budget for achieving different goals.
Performance targeting: The advertisers will be able to target their audiences smartly and effectively. The toolkit assures them of reaching the right audience.
Business accounts: Additive tools will be featured along with the business account. The toolkit will come handy with some additional customization features. These features will give the advertisers a glimpse of engagement with the audience and performance analysis.
Back-to-business program, available worldwide to the users.
The program will provide a $100 million advertising credit to small businesses. The small businesses are greatly affected during this epidemic lock-down. Therefore, the advertising fund will help the users to rebuild their market and get back on their feet in the business.
Small businesses are the backbone of every economy. The advertisement and marketing will help them to get back into the business.
Any small business can apply for this credit. The credit can be availed by applying on the website, under back to business.
How To Advertise Effectively On TikTok- Process And Costs Laid Out.
Even though marketers are always discussing to run ads on TikTok, but only a handful of them can do that. The situation has gone even worse during the period of recession.
The cost to run an ad to reach 1000 audience is $8 in the UK. Also, The minimum advertisement budget has to be at least $25,000. Looking at this amount you can guess that this platform is not for those who are looking forward to advertising cheap. However, those who are willing to spend this fortune will have the luxury of advertising on this platform.
Image Credit- influencermarketinghub
The advertisement on TikTok comes into the premium category and it is managed by the sales team of TikTok. They make sure that the advertisement is unique and catchy and worth the hefty price paid by the advertiser. This results in uniqueness and quality of content gaining worthy audience. Hence, they can’t be compared to the misguided ad-campaigns on Snapchat and Instagram.
Image Credit – Twitter.
Recently, TikTok shared a rate card with the media in the UK.
Image Credit – Medium
The Takeover ads.
These type of ads are generally portrayed to the audience as a start-up ad. The time frame of this ad consist of 3-5 seconds.
For each category, only one advertiser can put an ad, for a day. This ad costs around $53,000 per day and is used to buy 8.9 million impressions.
A Topview ad.
This ad appears as a start-up ad when the application starts. The ad can usually last up to 60-seconds. These advertisements also contain sound.
The cost to run this advertisement is $65,000 per day. It will help advertisers to reach 7.4 million impressions. A Takeover ad can be converted to a Topview ad if the advertiser is willing to pay the difference in the amount.
In-Feed video (Maximum for one-day).
The usual time duration for these ads is 15-seconds. They are shown in video feeds of the user and usually appear in the fourth feed. To reach 3.6 million impressions with these an advertiser has to pay $26,000.
Image Credit – influencermarketinghub
Brand Premium In-Feed videos.
This type of ad on TikTok can cost an approximate of $25,000. These ads are randomly placed in the feeds of user are shown after every 130th feed a user completes.
The Hashtag Challenge.
The Hashtag challenge is quite popular on the TikTok. A user can create a video and post it under a hashtag. This hashtag works as a challenge for others. It will challenge them to compete with the video content by posting similar content in a better manner.
https://www.youtube.com/watch?v=-Q3a7BSAJ5A#action=share
The advertiser can add their voice-over to the hashtag or they can simply add a piece of official music. This format includes both, One day ads and brand takeovers. The cost of this format of advertisement is $130,000. Features of this advertisement include Special content protection, Banner, personalized hashtag and their challenge page.
The Hashtag Challenge+
By paying an additional fee ($130,000+$30,000=$16,000), an advertiser can upgrade their ad to Hashtag challenge plus. The advertiser gets all the features of Hashtag Challenge, besides, they can direct people to their app or store within the application.
Image credit – TikTok
The Branded Effect.
An advertiser can attach 2D animated lenses and a user can use lens by their hand or face movements. Tik-Tok creative team created this effect. The cost of this format of advertising is $45,000 for a time frame of 30-days.
Even though all these options may seem costly to a new advertiser, they can take a test drive with cheaper options available. Maybe, that is the reason so many brands and influencers are collaborating to advertise the product on Tik-Tok.
Jide Maduako, the CEO of Yoke Network said, “Influencers are the only way to advertise on TikTok because all the best viral content on the platform is made by them.”
Image Credit – influencermarketingh.
He also stated, “Advertisers need to be paying closer attention to the consistency of views of influencers. It’s a strong indicator as to how successful your video will be when brokering deals.”
The following information is provided by TikTok regarding the creator package.
The Mid-tier package.
The package can consist of a total of five-creators, all of them will have a minimum of million followers on the application. The cost of the advertisement with the help of influencers is $12,000.
The Top-tier package.
The number of creator or influencer will remain the same(five) as of the Mid-tier package. However, influencers will have followers between 1 million to 5 million. The package will cost $35,000.
The Value Hybrid package.
The package will include a total of five influencers. Among them two will be from the Top-tier and Three will be from the Mid-tier. The cost of the package will be $20,000.
The Premium Hybrid Package.
With Premium Hybrid Package You will get one “VIP” influencer and two of each(mid and top tier) influencers. The package will cost $30,000.
Image Credit – Appinventiv.
